Introduction

This book explores a controversial issue in the analysis of development – whether integration into the international capitalist economy entails relative stagnation for underdeveloped economies or the possibility of sustained economic growth and diversification. We focus upon one provincial region of Peru – the central highlands – whose economic and social structure has been shaped by involvement in the international economy from the latter half of the sixteenth century and which, in recent years, has become peripheral to the more dynamic growth pole of Lima.

Our conclusion is that significant growth and diversification has taken place in the region and that this is directly attributable to capitalist expansion. Throughout our analysis we emphasize the social and political dimensions of this process since the local dynamic of capitalism has involved important changes in class relationships consequent upon the emergence of a wage labour force and new entrepreneurial groupings

This conclusion is particularly significant since the economy of the central highlands has been closely linked in this century to the fortunes of large-scale, foreign-owned mining enterprise. At first sight, the mining complex had the characteristics of an economic enclave with few dynamic linkages with the area's economy. This is precisely the situation that is supposed to prevent economic growth at the periphery. However, we will seek to show that such an interpretation fails to take account of the significant but small-scale processes of accumulation resulting from the exchanges between the enclave and a peasant population which, for centuries, had been involved in labour and commodity markets.